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Hawaii
A new movement is afoot in Hawaii that could have major implications for Hawaii real estate markets.
Like any resort real estate market, Hawaii has its share of issues. Residents have long complained about vacationers creating noise in their off the tourist track neighborhoods. Concerns have led to a series of proposals by lawmakers in Oahu, Maui and Kauai. Legislators are making efforts to outlaw short term vacation rentals in some areas, which could have devastating effects on local real estate markets.
In Maui, one proposal could stop the majority of rental properties from being rented out at all as vacation rentals. The disputes forced by full time residents of the island, along with the credit crunch are reducing the sales of homes and condos.
As a result of slower sales, the outlook for the rest of 2008 is less positive for Hawaii’s markets, and the forecasts for everywhere in the nation’s leading resort destination have been reduced.
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| City |
Forecast |
| Honolulu |
− 7.2% |
| Maui |
− 6.7% |
| Hilo |
− 5.8% |
| Kauai |
− 4.6% |
However, regulatory changes of the J-REIT (Japanese real estate investment trust) will allow capital to purchase property in Hawaii and could provide an infusion of buyers for the islands.
Honolulu housing prices are deflating as the state’s largest urban area suffers the consequences of the credit crisis. Waikiki hadn’t seen as big a boom since the area was first developed in the 1960’s as a major tourist destination.
Builders are still constructing homes and condos, but sales throughout the islands have slowed. Hawaii was one of only a few states in the country to have more stable housing markets, but slower sales have brought an end to that in this once booming paradise.
Honolulu condo sales have slowed as loans have been harder and harder to get in the new economy. Honolulu is now forecast to deflate an average of 7.2% for the year and is turning into a buyers market.
Hilo is the state’s second largest urban center and sales are also getting sluggish, and will remain that way as the marketplace changes from a sellers to a buyers market. Deflation is forecast to average 5.8% for the year.
In Maui condo development is underway. Maui is becoming the state’s second most developed island and new construction is still on-going. An increasing slowdown will send Maui housing values down an average of 6.7% through 2008.
On Kauai home sales have also slowed slightly, but with its more relaxed less urban setting Kauai still has healthy consistent growth. Condo development is limited to four stories on this remote more 1970's version of the islands, keeping the flavor of Hawaii rituals more intact.
Kauai is forecast to see slower sales through the end of the year and deflate a forecast 4.6% on the average property.
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